For buyers on insurance exchanges, coverage lapses are common

As open enrollment season gets underway, patients purchasing their own health insurance policies from a state or federal exchange are making careful choices. But if this year’s cohort of buyers is like last year’s, a significant portion of them may lose or drop their coverage before the end of 2016. Data continues to show the importance of thorough communication and financial counseling with this at-risk group.

The New York Times recently reported that approximately 15 percent of people who purchased coverage on the marketplaces for 2015 had dropped it by the end of June. While some patients may have dropped their policies after gaining coverage elsewhere, the article highlights two other main contributors to the problem:

Cost remains a major challenge for patients on the individual market, despite the subsidies that many receive. People may start the year with the best intentions about maintaining their coverage, yet still fall behind on payments. As one woman profiled in the article states, “When you owe on your house, on your truck, when you’re a single parent of a college student and you have other bills, it just doesn’t work.”

Many patients are confused by the communication they receive from their insurance company, and have their policies cancelled after missing payments they didn’t realize they had to make, or failing to provide requested information. On the federal exchange, more than 400,000 patients lost their coverage in 2015 after they did not respond to document requests from their insurer. For insurance buyers who have not had coverage in the past, the vocabulary and procedures used can be especially confusing.

For providers, this data underscores the need for accurate eligibility verification at every visit. Larry Levitt of the Kaiser Family Foundation summarizes the transitory nature of these policies, stating, “This market is always going to be a temporary way station for some people until they get a job with health benefits.”